Jaleel Ahmad

Causality between exports and economic growth: Empirical evidence from Africa

Abstract This paper utilizes Granger causality tests in investigating the relationship between exports and national income from a consistent data set for 47 developing countries in Africa. New empirical results as well as suggestions for future research are presented.

Unit roots and cointegration in estimating causality between exports and economic growth: Empirical evidence from the ASEAN countries

Abstract This paper utilizes cointegration and error-correction representation methodology in estimating the long-run behavioral relationship between exports and economic growth in the ASEAN countries.

Cointegration and Causality between Exports and Economic Growth: Evidence from the ASEAN Countries

The relationship between exports and economic growth occupies the center stage in development policy. While earlier regression results uncovered a positive correlation between exports and economic growth, attention has now shifted to the direction of causality. The purpose of the present paper is to investigate the causal relationship between exports and economic growth for the five member countries of the Association of South East Asian Nations (ASEAN), namely, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The economic success of the Asian NICs (newly industrializing countries) has prompted all countries in the region to pursue aggressive export promotion strategies, and some countries have indeed achieved rapid economic growth. But the answer to the primary question as to whether export expansion causes economic growth remains obscure.

Causality Between Exports and Economic Growth: What do the Econometric Studies Tell Us?

This paper contains an assessment of major econometric studies that have estimated the causality between exports and economic growth. These studies have used a variety of methodological approaches, such as Granger causality, cointegration with multivariate error correction models, exogeneity and structural invariance, VAR models with variance decomposition, and impulse response functions. The assessment in this paper refers both to the methodologies employed as well as to the empirical findings. A major conclusion is that empirical support for the export-led growth in both the developed and the developing countries is considerably weaker than was estimated on the basis of earlier correlation and production function studies.

Prospects of trade liberalization between the developed and the developing countries

Abstract This paper analyzes the theoretical and policy aspects of various possible approaches — multilateral, preferential and others — toward new initiatives for liberalizing trade relations between the developed and the developing countries. The increasing differentiation between the Newly Industrializing Countries (NICs) and the Less Developed Countries (LDCs) suggests that a multidimensional framework, allowing flexibility in dealing with different subsets within the developing countries would be more relevant. The paper analyzes the probable outcomes and constraints of the various trade-liberalizing options with regard to their effects on trade flows, welfare and terms of trade.

South-South Trade in Manufactures: A Modified Heckscher-Ohlin Model of Bilateral Trade and Some Preliminary Estimates

This paper attempts to interpret the recent growth of south-south trade in manufactures, with a view to highlight the Key factors that propel its growth, and to examine its implications for north-south trade. This is done in the framework of a modified Heckscher-Ohlin model of bilateral trade between three tiers of countries, viz., the developed countries of the OECD, the Newly Industrializing Countries (NICs), and the Less Developed Countries (LDCs). The paper also provides empirical estimates from trade data for the years 1970–1982 in order to illustrate a key proposition of the model. [420]

International Liquidity and World Inflation

The Bretton Woods regime of fixed exchange rates, particularly in its later years, periodically suffered from the ‘Triffin Dilemma’, i.e. either too little liquidity or too little confidence. These alternating crises resulted from the fact that while dollar reserves could be created only through deficits in the US balance of payments, the cumulative effect of these deficits was to reduce the ratio of the US official gold stocks to the outstanding dollar claims on the US held by the foreign central banks. The progressive accumulation of the stock of dollar claims on the US against a declining stock of US gold posed a ‘confidence’ problem for the reserve asset (Triffin, 1960).1 The adoption of floating exchange rates by major countries since 1973 has broken the link between the US balance of payment deficits and the involuntary acquisition of dollar claims by foreign central banks. This has generally resulted in a greater flexibility of reserve supply arrangements, largely by making the process of reserve creation primarily ‘demand oriented’. This flexibility in reserve creation has also been abetted by the volatility of reserve needs under the regime of managed floating, partly due to the erratic shifts in exchange rates themselves and partly due to exogenous shocks.

Domestic demand and ability to export in developing economies: Some preliminary results

Abstract This note offers preliminary empirical evidence on the relationship between domestic demand and the ability to export in the developing economies. It utilizes the framework of the ‘Linder Thesis’ and its recent extensions in order to estimate the parameters of this relationship through regression analysis.

Why are there so many Preferential Trade Areas? A Political Economy Perspective

Abstract This paper investigates the causes of the phenomenal growth of preferential trade areas (PTAs) in the world economy during recent decades. A political economy analysis suggests that the attraction of PTAs may be due, in large parts, to (a) a preference for manufacturing industry, rather than merely the gross domestic product (GDP), and (b) the prospect of greater foreign direct investments, in countries forming or joining a PTA.

Monetary Policy in the Industrial World: Reflections on some Basic Issues

Abstract This paper is a general assessment of monetary policy in major OECD countries during the 1990s. Within a simple policy framework that combines money growth, nominal income, and an open economy IS-LM type Mundell-Fleming model, the paper discusses the major strands in the conduct of monetary policy in developed industrial economies. It throws light on such problems as “rules versus discretion”, management of exchange rates, the effect of monetary changes on income and prices, and the rupture of monetary policy with other instruments of economic policy that also affect the economy.